- FNGR stock jumped 93% on Monday.
- FingerMotion stock has a small float, commonly targeted by the retail crowd.
- On Tuesday, the heavily shorted stock rallied 20% before collapsing about 12%.
FingerMotion (FNGR), the heavily shorted stock that short squeeze enthusiasts have glommed onto this week, ran up another 20% on Tuesday after its 92.9% surge on Monday. FNGR shares traded near $7.80 at the open before selling off over 12% to $5.70 half an hour into the session.
FingerMotion stock news
Based in New York City, FingerMotion provides mobile payment and recharge solutions for Chinese telecom companies. It provides the necessary software platform for telecoms to provide their customers with data, SMS, subscription and loyalty point redemption services. FingerMotion also operates Sapientus, a platform that delivers data insights to insurance, healthcare and financial firms.
The primary reason for FNGR stock rallying more than 1,000% is the retail crowd's notion that it is heavily shorted. Data from Morninstar, however, says that FNGR had less than 1% of its float sold short as of mid-September. A report purported to be from a firm called Buyins.net, however, is being shared all over social media. The report appears to show a large number of naked shorts.
Short volume data for FNGR
Whichever the case may be, FNGR has a miniscule float of just 23.6 million shares. This allows a rather limited group of investors to drive the share price with repeated bulk buying activity. This is likely the cause here, as there has not been any news of note in the past week to allow for such a strong rally.
Despite its seemingly limited and competitive market segment, FingerMotion has been steadily growing sales in recent years. Fiscal 2021 revenue of $16.7 million was topped by $22.9 million in fiscal 2022, and it appears more than likely that FingerMotion will top that in fiscal 2023.
FingerMotion stock forecast
In the space of writing this piece, FNGR's share price has sold off quickly. Now it has broken below the 9-hour moving average. On the Fibonacci retracement graph below (1-hour chart), FNGR shares should target the 23.6% Fibonacci level at $5.06. First, it would have to break below the 21-hour moving average at $5.56.
Monday's high at $10.09 remains the point of resistance, but bulls are unlikely to jump back in unless the share price moves back above the 9-day, currently at $7.42.
FNGR 1-hour chart
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